5 Tips For Landlords During Difficult Times
Landlords often complain about late rent payments, reduced payments, and non-payments. With the current economic climate, it doesn't seem as if it is getting any better.
There is a lot of pressure on people to meet their monthly bills and if they can't pay their rent on time, it negatively affects the landlord.
Even though a property is an excellent investment, the landlord should take precautionary measures to ensure they are protected against any risks.
Here are a few things that landlords can do to protect their investments when renting out their properties:
#1 - Have tenants pay their rent into a separate account
Usually, landlords let their rental income from part of their main bank account but it would be wise to open a separate account for this purpose. This is especially important if you are dependent on the rent to pay your monthly expenses.
The separate account should be used for rental income only and there should be no debit orders linked to it.
If the tenant defaults on their rental payments and debit orders bounce, the landlord will carry the penalty fees.
#2 - Landlords should create a reserve fund
If the tenant is leasing a house from you and they default on their monthly rent, you become responsible for covering the mortgage of the property. This gets difficult if you don't have any extra savings lying around.
Create a reserve fund in which you have extra money, so that the bond payment can be fully covered every month.
Remember that the property is still in your name and you are responsible for ensuring that these payments are made. If bond payments are late, it could harm your credit score.
As soon as the landlord pays you the rent, you can then replace the money.
#3 - Landlords should take immediate action on non-payments
Everyone is feeling the economic pressures and if tenants aren't paying, then the pressure is shifted onto the landlords.
Landlords need to be as alert as possible and do everything in their power to ensure that tenants pay their rent on time.
Before accepting a tenant, you must conduct a vigorous vetting process and do background checks.
As soon as they sign the lease agreement, ensure that they understand what the process will be once they breach the contract.
Always remember that you can end the agreement after multiple breaches.
#4 - Put money aside for maintenance
Tenants often neglect the maintenance of a rental unit because they feel that it remains the landlord's responsibility. Some landlords, on the other hand, feel that the tenants should also play their role in ensuring the unit is kept in good condition.
Both parties are responsible for keeping the unit in good shape.
It is a good idea to keep one month's rent aside to cover any maintenance issues. Landlords are still responsible for the wear and tear of the property as well as the financial costs involved.
#5 - Conduct ingoing and outgoing inspections
Landlords should conduct ingoing and outgoing home inspections before and after the tenant moves in.
Be sure to take photos and notes of the condition of the unit before it is occupied.
As soon as the tenant moves out, walk through the unit with them and look for any signs of damage that might have occurred during the tenant's occupancy.
You can deduct damages from the rental deposit, but make sure you clearly state this in your rental agreement.
The current economic climate is forcing landlords to be extra vigilant when it comes to tenants. If you follow these steps then you can cover yourself against any major losses.